Britain Is Already Bangladesh’s Largest Investor. Why Not Build a British Economic Zone in Sylhet?

There is a familiar way in which Bangladesh talks about its diaspora. Successful expatriates are praised at receptions, given awards, invited to conferences and thanked for sending money home. Their contribution is described in warm language. Yet the state has rarely built institutions capable of converting that relationship into sustained productive investment.

For the British-Sylheti community, this gap is particularly striking. The United Kingdom is not a marginal investor that Bangladesh still needs to persuade of the country’s existence. It is already the largest single-country source of inward foreign direct investment stock in Bangladesh.

Bangladesh Bank’s latest FDI survey puts total inward FDI stock at about $20.06 billion at the end of 2025. Of that, the United Kingdom accounted for $3.22 billion, or 16 per cent, ahead of Singapore, China, South Korea and the Netherlands.[1] A Bank of Scotland international trade guide, using an earlier data vintage, puts the British share at roughly 17 per cent.[2] The precise percentage moves with the reporting period, but the strategic fact does not: Britain occupies first place.

That changes the policy question. Bangladesh is not trying to invent an investment relationship with the UK. It already has one. The challenge is to deepen it, diversify it and connect it to a part of Bangladesh that has an unusually strong human relationship with Britain.

A British Economic and Innovation Zone in Greater Sylhet could do exactly that.

The FDI fact changes the argument

The significance of Britain’s position has been underplayed in Bangladesh’s economic diplomacy. Discussion of foreign investment often turns first to China, Japan, India, South Korea, the Gulf states or the United States. Those countries are important, and several have been offered dedicated economic-zone arrangements. But the accumulated investment position tells a different story.

At the end of 2025, UK FDI stock stood at $3.218 billion. Singapore, the second-largest source, stood at $2.254 billion; China at $1.917 billion; South Korea at $1.838 billion; and the Netherlands at $1.807 billion.[1] Britain’s lead is therefore not symbolic. It is measurable.

Bangladesh’s own investment authority made the same point during investment outreach in London in 2025, describing the UK as the country’s top source of FDI and reporting a stock of $2.9 billion in FY2023-24.[3] Since then, Bangladesh Bank data show the stock rising further.

There is an important technical distinction. FDI stock is the outstanding value of foreign direct investment at a point in time, not simply the arithmetic sum of every pound or dollar historically invested. But for policy purposes it is the more useful measure: it shows the scale of an investor country’s continuing ownership and exposure in the economy.

In other words, the UK already has more capital embedded in Bangladesh than any other individual foreign economy. Yet that relationship has no flagship geographic expression comparable to the Japanese economic zone at Araihazar or the Chinese zone at Anwara.

Britain has already been offered a zone. The offer went nowhere

It would be wrong to say that no Bangladeshi government has ever considered a British economic zone. In January 2024, Sheikh Hasina publicly offered to allocate a separate economic zone to British investors, explicitly noting that Bangladesh had already provided land for country-specific zones for other countries.[4]

What followed, however, was not a functioning British zone. There was no dedicated site developed around a UK investment pipeline, no joint delivery structure comparable to the Japanese model, no cluster strategy and no sustained programme linking British firms to a particular location.

That experience is useful because it shows the difference between an investment announcement and an investment institution. A zone is not created by naming one. It needs land that is genuinely developable, utilities, transport connections, environmental certainty, a defined sector proposition, transparent incentives, investor aftercare and a delivery team with authority to solve problems.

Bangladesh’s experience with country-specific zones also shows that the label itself guarantees nothing. The Japanese Economic Zone at Araihazar has attracted operating firms and a growing investment pipeline, while other proposed country-specific arrangements have progressed much more slowly or been abandoned. The lesson is simple: the investor proposition has to come before the flag.

The proposal is not that Bangladesh should give Britain special treatment because of history. It is that Bangladesh should organise an investment relationship that is already larger than any other single-country relationship.

Why Sylhet is the logical place

From a conventional industrial-planning perspective, Sylhet is not the obvious location for Bangladesh’s next large manufacturing zone. Chattogram has the seaport. Dhaka and Narayanganj have deeper industrial labour markets and supplier networks. Mirsarai offers the scale required for heavy industrial development.

Sylhet’s advantage is different. It possesses an economic asset that no other region of Bangladesh can reproduce: an unusually dense, mature and intergenerational network within the United Kingdom.

Academic research consistently identifies Sylhet as the principal region of origin of Britain’s Bangladeshi diaspora. Recent studies estimate that the overwhelming majority of British Bangladeshis have Sylheti family origins, with connections maintained through family, property, philanthropy, business and frequent travel.[5]

That network matters because one of the largest barriers to international investment is not the headline tax rate or the price of land. It is uncertainty. A medium-sized British company considering Bangladesh has to understand local regulation, contracts, recruitment, banking, customs, business culture, government institutions and commercial risk. A multinational can buy that knowledge. A smaller firm often cannot.

British-Sylheti entrepreneurs and professionals can reduce that uncertainty. They understand British corporate expectations and Bangladeshi institutional realities. They can introduce partners, interpret business practice, recruit trusted management, assess locations and help resolve the cultural misunderstandings that frequently derail international ventures.

This is more valuable than remittances alone. It is a form of economic infrastructure.

Bangladesh has celebrated the diaspora more than it has organised it

For decades, Bangladesh’s relationship with expatriates has centred on three things: remittances, property and recognition. The state encourages foreign-currency transfers, courts expatriate buyers of land and flats, and periodically honours commercially successful non-resident Bangladeshis.

Those measures have value, but they are not a diaspora investment strategy.

The British-Sylheti community now contains business owners, financiers, doctors, lawyers, engineers, architects, planners, academics, technology professionals, media figures and politicians. Many operate inside institutions that Bangladesh itself is trying to build capacity in. Yet engagement is still too often organised around personalities rather than sectors and projects.

An award recognises individual success. An investment institution makes that success economically reproducible.

The Government should therefore stop treating diaspora engagement principally as a matter of sentiment. A successful British-Sylheti businessperson should not be told to invest because Bangladesh is the ancestral homeland. The proposition should be commercial: what can Bangladesh offer that helps a British company remain competitive, enter Asian markets, reduce operating costs, develop new products or access skilled labour?

If the answer is convincing, emotional connection becomes an advantage rather than a substitute for economics.

The timing is unusually favourable

The proposal also fits the direction of Bangladeshi economic policy since the fall of Sheikh Hasina’s government in 2024.

The interim administration led by Muhammad Yunus made foreign investment and reform of the business environment a central economic objective. Bangladesh’s investment agencies increased overseas outreach and attempted to simplify the investor journey. The BNP government that took office in February 2026 has continued that emphasis rather than reversing it.

In March 2026, the government unveiled a 180-day investment action plan focused on the business environment, investor services and coordination among the country’s main investment agencies.[6] In July, Parliament passed legislation to establish Invest Bangladesh by bringing together the principal investment and economic-zone functions under a single apex structure.[7] Prime Minister Tarique Rahman has also made unusually direct appeals for foreign investment, telling businesses in July that his government wanted them to invest and expand in Bangladesh.[8]

This is precisely the moment at which a UK-Sylhet proposition could move from an old diplomatic idea to a test case for the new investment architecture.

The United Kingdom is receptive as well. During an April 2026 visit to Dhaka, the UK Trade Envoy described Britain as a leading development and investment partner and emphasised two-way trade, job creation and long-term sustainable growth.[9] Britain’s own trade strategy calls for deeper growth and investment partnerships with the Global South, including expertise exchange and investment mobilisation.

The commercial relationship is already substantial, but unbalanced

The bilateral trade figures reinforce the case for a more deliberate investment platform. UK government data show total trade in goods and services between the two countries reaching £4.5 billion in the four quarters to the end of March 2026, up 12 per cent year on year.[10]

The relationship, however, is heavily weighted towards Bangladeshi exports. Britain imported £3.8 billion from Bangladesh over that period, while UK exports to Bangladesh were about £700 million.[10] Clothing dominates Bangladeshi goods exports to Britain.

The composition of British exports points towards a different opportunity. Of the UK’s £700 million exports to Bangladesh, £414 million were services. Britain therefore already has a stronger relative position in Bangladesh’s services market than in its goods market.[10]

That matters because Britain’s competitive strengths are not primarily in low-cost mass manufacturing. They lie in finance, engineering, architecture, professional services, higher education, technology, life sciences, creative industries, management, standards and specialised manufacturing.

A British zone in Sylhet should therefore be designed around the structure of the British economy, not around a generic Bangladeshi industrial-estate model.

Britain can offer more than capital

The most persuasive argument for a British-focused zone is not that UK investors have more money than investors elsewhere. They do not. China, Japan, the Gulf states and the United States all have access to capital on a scale Britain cannot uniquely claim.

Britain’s distinctive offer is the package surrounding investment.

The UK has internationally influential systems of professional accreditation, corporate governance, planning, engineering, financial services, insurance, higher education, research and workplace regulation. British firms often arrive with mature procedures for health and safety, quality assurance, project management, environmental reporting, staff development and customer service.

These are forms of productive capacity. Bangladesh’s long-term challenge is not merely to increase the volume of foreign capital but to raise productivity, managerial quality and the sophistication of its economy. Investment that transfers systems and expertise can therefore be more valuable than an identical amount of capital invested in an enclave with little connection to local firms.

The UK is also a longstanding development partner. British government strategy for Bangladesh has combined development programming with investment policy, financial-sector reform and impact investment. British International Investment was given a Bangladesh investment target of $455 million for 2022-26 under the UK-Bangladesh development partnership framework.[11]

A UK-Sylhet zone could bring those strands together: commercial investment, development finance, technical expertise, skills and diaspora networks.

What the zone should actually do

Calling the proposal an “economic zone” should not dictate its physical form. A British Economic and Innovation Zone in Greater Sylhet should be compact, mixed in function and deliberately higher-value.

Digital and business services should form one pillar. Bangladesh already has a growing software and outsourcing sector. British companies could use Sylhet for software engineering, customer operations, accountancy support, design, data services, cybersecurity and specialised back-office functions serving UK and international clients.

Professional and technical services should form another. British engineering, planning, architecture, environmental, surveying, legal and project-management firms have expertise directly relevant to Bangladesh’s urbanisation and infrastructure needs. Joint ventures could serve both domestic projects and overseas markets while training Bangladeshi professionals to international standards.

Education and skills should be built into the zone rather than treated as a separate policy area. British universities, colleges and professional institutes could establish training centres, applied research programmes and employer-linked qualifications. Investors could be offered incentives tied to apprenticeships and management development.

Health and life sciences offer another natural bridge. The British-Sylheti community includes a substantial body of medical professionals. Diagnostics, medical training, telemedicine, healthcare technology, specialist clinics and support services could draw on that network.

Agri-food is particularly relevant to Sylhet. Tea, fish, citrus and other regional products already have a diaspora market in Britain. Better processing, testing, branding, packaging and cold-chain infrastructure could turn that familiarity into higher-value exports.

Aviation-related services, renewable energy, tourism technology and selected light engineering could complement those sectors. The aim should be a portfolio of activities that benefit from Sylhet’s international links without demanding the land, port access and environmental footprint of heavy industry.

Sylhet’s landscape should be an asset, not collateral damage

There is a planning reason to resist the conventional industrial-zone template. Sylhet’s green landscape is part of its identity and economic value. Tea gardens, haors, rivers, wetlands and hills are not spare land waiting for industrial conversion.

A poorly located economic zone could reproduce the worst habits of Bangladeshi urbanisation: speculative land acquisition, ribbon development, drainage loss and environmental degradation. That would undermine the very quality of place needed to attract higher-value workers, institutions and investors.

Existing economic or technology-designated land should therefore be considered first. The zone should be transit-connected, compact and infrastructure-led. Sustainable drainage, wastewater treatment, renewable energy, landscape buffers, worker housing and public transport should be designed in at the beginning.

A British-branded zone that adopted weak environmental or labour standards would also damage the proposition in the UK market. If the project is to trade on British expertise and standards, its physical development should reflect them.

→ All Topics

Sources and notes:

1. Bangladesh Bank, Foreign Direct Investment and External Debt, July-December 2025. At end-2025, total inward FDI stock was $20.061bn; UK stock was $3.219bn, representing 16.0% of the total, the largest share of any country.

2. Bank of Scotland Trade Portal, Bangladesh: Foreign Direct Investment. The current market guide reports the UK as the largest contributor to Bangladesh’s FDI stock at roughly 17%, based on an earlier reporting period.

3. Bangladesh Investment Development Authority, “UK to Boost Investment in Bangladesh’s Growth, Focusing on Education, Aviation and Renewable Energy”, 16 March 2025. BIDA described the UK as Bangladesh’s top source of FDI, with stock of $2.9bn in FY2023-24.

4. Bangladesh Sangbad Sangstha, “PM offers separate economic zone for British investors”, 28 January 2024. Sheikh Hasina offered to allocate a separate zone for British investors, noting country-specific land allocations for other investors.

5. A. K. M. Ahsan Ullah and Anabelle Ragsag, “Sylheti Diaspora in the United Kingdom: Exceptionalism or Contested Nationalism?”, Studies in Ethnicity and Nationalism, 2025; and related recent scholarship on the UK-Bangladesh diaspora.

6. Bangladesh Investment Development Authority, “Joint 180-day plan unveiled for BIDA, BEZA, PPPA and MIDA”, 16 March 2026.

7. Invest Bangladesh / BIDA, “Invest Bangladesh to be Formed as Bangladesh’s Apex Investment Development Agency by Unifying BIDA, BEZA and PPPA”, 16 July 2026; parliamentary reporting also records the merger of investment-related bodies under the new law.

8. Bangladesh Sangbad Sangstha, “PM invites foreign investors, promises business-friendly environment”, 24 July 2026.

9. UK Government, “UK Trade Envoy visits Dhaka to strengthen two-way trade and economic ties”, 6 April 2026. The UK described itself as a leading development and investment partner of Bangladesh.

10. UK Department for Business and Trade, Bangladesh: Trade and Investment Factsheet, 31 July 2026. Total bilateral trade in the four quarters to Q1 2026 was £4.5bn; UK exports were £700m, of which £414m were services.

11. UK Government, UK-Bangladesh Development Partnership Summary, July 2023. British International Investment was given an investment target of $455m in Bangladesh for 2022-26.

12. The Business Standard, “At a glance: Countries with largest FDI stock in Bangladesh”, based on Bangladesh Bank data, 2025. It reported $1.7bn of UK FDI stock in banking, representing 53.6% of the UK total at that reporting point.

Murshed Ahmed is a Senior Urban Planner based in the UK and Chartered Member of the Royal Town Planning Institute.

Photo: Tower Bridge, London

Use the diaspora as the bridge, not as the captive market

The first investors may well be British Bangladeshis. That is an advantage, but it should not become the limit of ambition.

The long-term test is whether a company in Leeds, Manchester, Birmingham, Bristol or Glasgow with no Bangladeshi ownership decides that Sylhet is commercially useful. Diaspora investors should help establish the track record that makes that decision easier.

This requires a deliberate investor-acquisition model. The Government could establish a UK-Sylhet Investment Council comprising British and Bangladeshi businesses, diaspora entrepreneurs, professional bodies, universities, the British High Commission and the relevant Bangladeshi investment authority. Its first task should not be another conference. It should identify a small number of credible anchor investors and ask exactly what would make them invest.

The answers may concern power reliability, customs, tax, profit repatriation, access to foreign currency, skilled staff, visas, land title or dispute resolution. Those constraints should shape the zone.

Once ten credible British businesses operate successfully, they become more persuasive than ten government roadshows.

The biggest opportunity may be diversification of British investment itself

The FDI data reveal another reason for a zone. Britain’s investment stock in Bangladesh is large, but it is concentrated. Bangladesh Bank-based reporting in 2025 showed more than half of UK FDI stock sitting in the banking sector.[12]

That concentration reflects Britain’s historic strength in Bangladesh’s financial system, including institutions such as Standard Chartered and HSBC. It is a valuable foundation, but it also means the largest foreign investor has considerable room to broaden its sectoral footprint.

A Sylhet initiative could therefore be presented not simply as a way to attract “more UK FDI”, but as a way to diversify British investment into technology, healthcare, education, advanced services, agri-food and professional industries.

This is strategically more convincing than chasing headline investment totals. A country benefits when foreign capital becomes embedded across suppliers, skills, institutions and regions rather than accumulating in a narrow set of sectors.

Recognition should become architecture

For British Sylhetis, the proposal carries a wider meaning. Their relationship with Bangladesh has often been acknowledged socially but underused economically. The community has financed homes, mosques, schools, charities and family livelihoods in Sylhet for generations. What it has rarely been offered is a transparent institutional platform through which professional and commercial capability can be invested at scale.

That is the transition Bangladesh now needs to make: from remittance policy to diaspora capital policy; from awards to institutions; from ceremonial engagement to investable projects.

Britain’s position as Bangladesh’s largest source of FDI stock makes the absence of such a platform harder to explain. The UK is already demonstrating confidence through capital. The Sylheti diaspora already provides the human bridge. Bangladesh is already reforming its investment institutions. Britain is already seeking deeper commercial partnerships in emerging markets.

The proposal therefore does not depend on nostalgia for Britain or special pleading for Sylhet. It rests on an alignment of existing economic facts.

A sensible next step would be a joint feasibility and investor-testing exercise for a British Economic and Innovation Zone in Greater Sylhet. It should examine existing sites, airport and road connectivity, utilities, environmental constraints, labour supply and the requirements of a defined group of prospective British investors. If the market supports a conventional zone, designate one. If it supports a smaller innovation district or a network of linked sites, use that model instead.

The form matters less than the institution.

Bangladesh has already proved that Britain is willing to invest. The more interesting question is why the country has not yet built a serious mechanism to turn its largest foreign investment relationship, its deepest European diaspora connection and Sylhet’s unique place in British-Bangladeshi life into a regional economic strategy.

A British Economic Zone in Sylhet would not be a gift to Britain. Nor should it be a favour to expatriate Sylhetis. Done properly, it would be a commercial platform in which Bangladesh gains investment, skills and diversification; British firms gain a competitive base and access to a growing market; and Sylhet gains a route from remittance-led prosperity towards productive, knowledge-based development.

That is what a genuinely win-win partnership would look like.

Navigation:

Home

About

News

Contact

Categories:

All Topics

Climate, Environment & Place

Economics, Business & Work

Education, Culture & History

Health & Social Care

International Affairs & Security

Politics, Governance & Society

Science, Technology & Innovation

© 2026 Groundwork. All rights reserved.